Rock Products

OCT 2012

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ALJ Has Right to Refuse Settlements and to The Federal Mine Safety and Health Review Commission ruled that its administrative law judges are permitted to consider the deterrent effect of a proposed penalty when deciding whether or not to approve a settlement, and an ALJ did not abuse her authority when requesting that the Solicitor's Office turn over additional informa‐ tion before the settlement was approved. The case was one of first impression on whether a penalty could be increased as a deterrent. The ruling was issued by Chairman Mary Lu Jordan, Commissioner Patrick Nakamura and former Commissioner Robert Cohen, who said in the majority opinion that "deter‐ rence is a principal basic to and underlying the entire statutory scheme of imposing civil penalties." Commis‐ sioner Michael Young and former Commission Michael Duffy dissented, saying that deterrence is implicit in the application of the six statutory civil penalty criteria. The decision stems from three cases where ALJ Mar‐ garet Miller rejected a settlement when the Dept. Of Labor Solicitor's Office agreed to an 80 percent reduc‐ tion, but did not provide a sufficient explanation for the reductions. The ALJ said the reduction "would not adequately effec‐ tuate 'the deterrent' purpose underlying the Act's penalty assessment scheme," and that such extreme re‐ ductions "would encourage operators to contest the penalties in the hope of receiving such a reduction." Miller also stated that ALJs are required by Commission precedent to provide a sufficient explanation when a penalty assessment diverges substantially from a pro‐ posed penalty, and in these settlements the Solicitor's Office did not provide a sufficient explanation for the penalty reductions. The Solicitor's Office claimed that a judge may not con‐ sider deterrent effects of penalty amounts agreed to by the parties as a factor independent of the six statutory criteria in section 110(i) of the Mine Act. The mining company argued that the ALJ erroneously usurped the Secretary's prosecutorial role, and that an ALJ has no authority to review underlying modifica‐ tions of citations. www.rockproducts.com Consider the Deterrent Effect Of Civil Penalties By Ellen Smith On the issue of reviewing a settlement, the Commissioners said, "The plain language under 110(k) of the Mine Act ex‐ plicitly authorizes the Commission to review a proffered settlement of a contested penalty." The majority also quoted the legislative history showing one of the stated goals of the revamped Mine Act in 1977 was to bring trans‐ parency to the entire civil penalty process and the impor‐ tance of an ALJ review of settlements. While there are six civil penalty criteria used to make a penalty determination, Congress did not impose "explicit limits on what should be considered in this review. Nor do Commission rules limit what a judge may or may not consider." The majority opinion pointed out that in 1980 the Commis‐ sion deleted a requirement that an ALJ had to discuss the six statutory criteria. "In deleting this requirement, the Commission stated the amendment was 'intended to en‐ hance the flexibility of the Judges to approve settlements.' We believe such flexibility should also include the option of explicitly taking into account the deterrent effect of the penalty when reviewing a settlement proposal." The Commission also relied on federal court cases stating that "deterrence provided by monetary sanctions is essen‐ tial" to the enforcement of the Mine Act. BLACK BEAUTY COAL CO., 8/20/2012, Docket No. LAKE 2008-327 et al. "Simply put, we refuse to require our Judges to apply blind‐ ers when reviewing settlement proposals, and to ignore the central and most obvious purpose of civil penalties – to ensure operator compliance with safety measures – when deciding whether such penalties are appropriate," the ma‐ jority wrote. "Deterrence is a principle basic to and underlying the entire statutory scheme of imposing civil penalties. Thus, deterrence can and should infuse the Judge's consideration of whether or not to approve a settlement." E ROCKproducts • OCTOBER 2012 47

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